Yesterday, I had some quibbles with the Ron Brownstein article that has become required reading in the White House, mainly that it focused entirely on the provider side of the equation and ignored the part that matters to the consumer--access to and affordability of high quality coverage.
Jon Walker has more than a few quibbles with the article and his criticique is well worth the read.
The problem is Brownstein just doesn’t understand health care systems. Take for example this jewel:
And, with only a few exceptions, that’s just about all the systemic reforms analysts from the center to the left have identified as the most promising strategies for changing the economic incentives in the medical system. (The public competitor to private insurance companies championed by the Left would affect who writes the checks in the medical system, but not what the checks are written to pay for.) Most of the other big ideas for controlling costs (such as medical malpractice reform) tend to draw support primarily among Republicans.
This one paragraph should show you how completely Brownstein lacks even the most basic knowledge about health care reform. The CBO concluded the Republicans’ "big idea" for controlling cost, extreme medical malpractice reform, would save/generate $54 billion for the Federal government. (I would challenge Brownstein to name another single Republican idea that would actually reduce cost, because they did not include any in their alternative bill two weeks ago, and I have heard of no others from them.) Let’s compare this to the public option.
According to the CMS, the strong public option (which paid Medicare rates plus 5%) promoted by House progressives would have costs 18% below that of private health insurance companies. The CBO concluded it would have saved $110 billion. This public option design was still considered weak by reform activists. Mandating that Medicare providers take part in the public option would have saved another$91 billion. If the public option could pay Medicare rates instead of Medicare rates plus 5%, that would have saved roughly another $50 billion. These savings are with the public option only being available to the small number of people on the new exchange.
Allowing every company to buy into this super-robust public option would give them a choice that would be roughly 20% cheaper than their current insurance plan. If even some of those savings were passed on to employees in the form of higher salaries, that would translate into hundreds of billions in increased tax revenue. This one progressive idea, which could save about $250-800 billion, is bad mouthed by Brownstein, yet he claims the Republicans continuous screaming about tort reform, which would save only $54 billion, is one of the "big ideas" for controlling costs....
The number one reason we pay so much more for health care has nothing to do with overusing care because of a fee-for-service system. It is just that the "fee" we pay for those services is so dramatically higher than any other nation’s.
It is not just what the public option’s "checks are written to pay for." The hope was the public option could negotiate better rates, and therefore write smaller checks. It could create system-wide change if other insurers followed suit.
Among all of the ways to skin the cost-control cat, a stronger public option certainly would rank a hell of a lot higher than tort reform. As Jon argues, the rest of the industrialized world spends about half of what the United States does on healthcare, and they've al done it with one basic thing in common--a single reimbursement rate negotiator, whether it's the government or a commission, something the robust public option could have helped achieve.
Brownstein's article is quickly becoming gospel in DC circles, if the reaction on cable TV is any indication. Andrea Mitchell just gushed all over him and it, and on a conference call with reporters this morning, Peter Orszag added to the plaudits. But the Brownstein article shouldn't be considered the last word on healthcare reform, particularly when there are still affordability and access issues surrounding the insurance reforms.